How To Use Bitcoin – The Most Important Creation In The History Of Man

Discussion in 'General Discussion' started by Anonymous, Jun 1, 2011.

  1. The Wrong Guy Member

    Bitcoin, not gold, has the Midas touch | Matthew Lynn's London Eye | MarketWatch


    Why is bitcoin is doing so well when gold is doing so poorly?

    The true believers in gold have a simple answer. The gold price is suppressed — governments and central banks have manipulated its price down because it threatens both their monopoly of paper money and their power.

    Bitcoin is similar to gold, they say, but because its price is freely set and can’t be manipulated, it is not being suppressed. On that version of events, bitcoin is simply doing what gold would be doing — soaring — if no one was getting in the way.
  2. Anonymous Member

  3. Anonymous Member
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  4. Anonymous Member

    James Howells, 28, obtained 7500 bitcoins in 2009 when the currency was virtually worthless. Its value has since soared, with a single bitcoin hitting $US1000 for the first time on Tuesday.

    Howells left the hard drive in a drawer for several years, and threw it away earlier this year without a second thought.

    To his horror, he then realised what it had contained - and that he would be a millionaire, if he could only find it.

    LOL more doh at link
  5. laughingsock Member

  6. Anonymous Member

  7. Anonymous Member

    I would be willing to donate some binary digits to replace the ones lost.
  8. Dis-orderly Member

  9. laughingsock Member

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  10. The Wrong Guy Member

    Black Friday: Bitcoin users get hundreds of discounts | The Telegraph

    More than 400 retailers are offering Black Friday discounts to those who pay with Bitcoin, the virtual currency, as “Bitcoin Black Friday” is launched.

    Although mainstream sites such as Amazon and eBay are not yet involved, some websites are offering discounts of at least 10 per cent if customers pay using Bitcoins, as well as special rewards.

    Not only can you buy a ticket to space on Virgin Atlantic with Bitcoin, Adafruit, the DIY and electronics website, is offering 10 per cent off everything including lego-style toolkit Raspberry Pi.

    Mobile gift card app Gyft is giving Bitcoin shoppers four percentage points back when you buy gift cards from its associated retailers, which includes Gap, Nike and Old Navy.

    Digital wallet Coinbase is also waving all fees on Black Friday so that Bitcoin users can buy, sell, send and receive Bitcoins all day. has a full list of retailers offering discounts to Bitcoin customers, and promises “hundreds of merchants selling everything from web hosting to organic beer [offering] special deals to anyone paying in Bitcoin.”

    Continued here:
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  11. JohnnyRUClear Member

    It's interesting to watch a new currency emerge without any legal tender laws forcing anyone to accept it, while currencies propped up by such laws collapse.
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  12. Anonymous Member

  13. Anonymous Member

  14. JohnnyRUClear Member

    Pretty good rational overview here:

  15. Anonymous Member

    Bitcoin Heist: Millions Vanish from Online Black Market

    By Tom's Guide / Jill ScharrDecember 4, 2013 12:53 PM
    View gallery
    A secretive online black market was robbed over the weekend, costing its users possibly as much as $100 …
    A secretive online black market was robbed over the weekend, costing its users possibly as much as $100 million in Bitcoins — and some say the thieves were the marketplace owners themselves.

    After the FBI shut down the largest online black market, Silk Road, in October, a number of other black market sites filled the vacuum. One was a narcotics bazaar called Sheep Marketplace.
    Like Silk Road and most of its ilk, Sheep Marketplace was only accessible via Tor, the anonymizing software designed to protect users' Internet anonymity. Furthermore, all transactions were in Bitcoin, a decentralized online currency that is difficult to trace.
    MORE: Security and Privacy Apps and Plugins
    On Sunday (Dec. 1), Sheep Marketplace abruptly closed down, claiming one of its vendors by the name of EBOOK101 had exploited a security vulnerability to steal $6 million in Bitcoins. Most, if not all, of that money belonged to the site's numerous users, who used it to buy and sell their dubious wares.
    "This vendor found bug in system and stole 5,400 BTC [about $5 million]—your money, our provisions, all was stolen," reads the message posted on the now-shuttered site's homepage. "We were trying to resolve this problem, but we were not successful."
    Despite the message's promise that "all of current BTC will be distributed to users, who have filled correct BTC emergency address," it doesn't appear that any Sheep Marketplace users have received refunds.
    That's all of the theft that can be confirmed. But the story doesn't end there.
    Some believe that the thieves were Sheep Marketplace's administrators themselves, and that the whole marketplace was an elaborate scam.
    A website called, set up before Sheep Marketplace's closing, lists what it claims to be evidence suggesting that the theft was an inside job.
    Sheep Marketplace users weren't able to withdraw Bitcoins for up to a week before the site's shutdown, according to several Reddit users. Deposits, however, were still possible.
    The admins blamed the problem on a technical glitch and said it would be fixed within a few days. They then said the problem was fixed, though on Reddit, former Sheep Marketplace users say that was never the case.
    By the time of the site's shutdown on Dec. 1, withdrawals still hadn't been enabled. alleges that many of Sheep Marketplace's higher-ranking administrators and vendors had drastically slashed prices, allegedly to encourage as many people as possible to deposit money.
    And a public but anonymous record on a website called, which tracks Bitcoin transactions, shows a transfer of 39,918 Bitcoins into a wallet associated with Sheep Marketplace at some point over the weekend.
    At the current Bitcoin exchange rate, that's more than $43 million — far more than the originally reported 5,400 BTC, or $5 million.
    MORE: Browser Plugin Secretly Mines Bitcoins at Your Expense
    Finally, a pair of Reddit users say they've been chasing a series of Bitcoin transactions that they claim originate with the Sheep Marketplace theft. The amount involved is more than 96,000 BTC, almost $100 million, and has been moved from wallet to wallet several times over the past several hours.
    Meanwhile, other anonymous online markets on the so-called "dark web" are also affected by Sheep Marketplace's closing.
    A site called Black Market Reloaded blocked new members, saying on its forums that Tor-based anonymous websites aren't designed to handle large volumes of users, and then announced a shutdownshut down as well, saying the site needed to close for maintenance.
    "Sheep went down and BMR can't stand," wrote a Black Market Reloaded admin called Backopy in a forum post dated Dec. 1. In the post, Backopy says that people will be given the opportunity to withdraw their funds before the closing.
    "Don't worry, we don't rip [off] anyone and will be back stronger than ever," wrote another administrator called LeContog in the same thread.
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  16. Anonymous Member

    Lol, couldn't see that coming.
  17. The Internet Member

    Shut my mouth, I thought we'd be rid of dishonest crooks once we got rid of the state and its nefarious currency controls.

    Also, lol "Sheep Marketplace." It's like a signal to the clever people to stay away, just as with "Bridge to Total Freedom."

    I thank the scammers for these clues and suggest a few more helpful business names for future projects:

    Target the Mark
    Rube City
    Shearing Station
    Take Me to the Cleaners
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  18. Anonymous Member

    Crooks will always be with us no matter what type of political and social system we have. Sad but true.
    ikr, they might as well have named it the Sheep Sheering Club or Sheeple.
    It's still interesting to see how this plays out.
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  19. The Internet Member

    Just a thought --what if the people who developed the Bitcoin algorithm are scammers? I mean, do we know how the amount of Bitcoin currency in circulation is controlled? Like, actually know not take someone's word for it?

    And I don't mean how you, Joe Q. Citizen can mine Bitcoins. I mean how John P Bitcoin Developer cannot magic himself moar Bitcoins than you.

    I would watch JohnnyRUClear's video to find out but its 51 minutes long.
  20. Anonymous Member

    The software is open source, and the proponents and opponents seem to agree that it is what it says it is. It is no longer being maintained by the original developer, but by a team of people, just like any open source software. If you read code, you can verify this claim yourself.

    I know nothing about the technical aspects, except the mechanics of how new coins come into being, but the people who do assure me it is not a fake. Both sides seems to accept the legitimacy of the software. It's the human factor that makes for most of the drama we're seeing.

    While it may not become a true money, I think the issue is still in play, and will be for a while. Governments hate the idea, but it has shown great use in countries where the government shuts down their own money, like happened in Iran a year or so ago.

    Even in the libertarian world, there are some, like Molyneux in Johnny's video, who think it's great, and Peter Schiff, who thinks it's a scam and a bubble. I think those two debated it recently. YouTube would find it quickly.

    It is certainly acting like a bubble, but we really can't say for sure what a new money would look like, and how long it would take to settle down to being a store of value as well as a purchasing device. For now, it is not, imho, a store of value, but it is a purchasing device.

    It's fascinating to watch it play out, though.
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  21. Anonymous Member

    Browser Plugin Secretly Mines Bitcoins at Your Expense
    By Jill Scharr
    DECEMBER 3, 2013 4:00 AM - Source: Tom's Guide US | B 11 COMMENTS

    Some computer programs do more than they advertise — and if so, it's rarely a good thing.

    California-based anti-virus company Malwarebytes found that a browser plugin called YourFreeProxy was, aside from its advertised features, using the computers on which it was installed to mine Bitcoins.

    MORE: 10 Reasons Coin Card Could Be a Security Nightmare

    A Malwarebytes customer first brought the issue to light when he reported an undeletable file on his computer called "jh1d.exe" that was tying up more than 50 percent of his computer's system resources, significantly slowing his machine down.

    On closer analysis, Malwarebytes realized that the file was a Bitcoin mining piece of software with the full name jhProtominer.

    What does that mean? Bitcoin is a type of digital currency that bases its value not on a centralized standard, but rather on a peer-to-peer computer network accessible through an application and storage system called a Bitcoin wallet.

    Bitcoins can be exchanged for other types of currency, or can be mathematically generated in a process called "mining," a potentially time-consuming process that also requires significant computer processing power.

    When the Bitcoin network first launched in 2008, one Bitcoin was worth less than a tenth of a cent. A few days ago, however, the value of one Bitcoin broke $1,000 for the first time. Bitcoin trading and mining have never been more lucrative.

    But the people unknowingly hosting these secret Bitcoin-mining toolbars won't see a cent of that money. The Bitcoin miner in YourFreeProxy was being remotely controlled via a program called "monitor.exe," ownership of which Malwarebytes traced back to a Las Vegas-based company called Mutual Public, or We Build Toolbars.

    Thanks to some careful wording in its End User Licensing Agreement (EULA), Mutual Public's bitcoin mining may be legal, if also deceitful. The EULA states that "as part of downloading a Mutual Public, your computer may do mathematical calculations for our affiliated networks to confirm transactions and increase security. Any rewards or fees collected by [We Build Toolbars] or our affiliates are the sole property of WBT and our affiliates."

    In other words, by downloading Mutual Public's software, users are ostensibly agreeing to let the company use their computers' processing power.

    "Take note if your system is running especially slow or if a process is taking up massive amounts of your processing power," writes Malwarebytes' Adam Kujawa on the company blog. "It might be malware or even a [potentially unwanted program] running a miner on your system.",news-17936.html
    • Like Like x 1
  22. The Internet Member

    Oh that malware idea is interesting. Widespread bitcoin mining would change the amount of bitcoin in circulation, I would think.

    So even though the code for making bitcoins is open source and legit, a bitcoin scam could involve other code projects that aren't so open source.

    More bitcoins going into circulation would help to keep the bitcoin market hot and bubblicious, maybe? Until the correction?

    Analogy: The Bitcoin developers allow everyone to see how the front door works, its system of locks, and ways to insure no tampering. Meanwhile there's another door, another method for making Bitcoins.

    Maybe someone knows if Mutual Public or We Build Toolbars is related to the Bitcoin developers. I bet you a donut they are.
  23. Anonymous Member

    Here's a quick summary of how new coins come into existence. This may clear up your question.

    At present, the system releases 25 coins every ten minutes, no matter how many computers are computing. Adding all those malware computers just makes each new block of 25 coins harder to mine, that is, the computations get more difficult. So the malware computers might be able to get a block, but that would depend on their ratio of computing power to the entire network.

    It started 5 years ago with 50 coins every ten minutes being released as a block. Every four years, the number in a block halves, so 50 became 25, and in 2017 it will become 12.5, and eventually (2140, iirc) it will fall below the division possible. At that point, there will be 21M coins mined, and no more will ever be created. I think it can go 8 decimals, so you can have 0.00000001 coins.

    This strict limit on how many can be mined is one reason why libertarians like it. It means that at maturity it cannot be inflated. If the theory is right, then the BitCoins would become more valuable over time, since no new coins can be mined. If no more gold were to be mined, then the existing stock would become more valuable.

    One problem is something Schiff mentioned a few weeks ago, that while gold will always have value to humans for industry and decoration, BC can go to zero, that is, have no value at all. But the same can be said of paper money (though paper can be used for kindling and the bathroom)

    I don't know tech details, but from reading through the articles it appears that methods are in use and being developed to trace stolen coins, such as those 96K that were scammed. If you send a coin to the block chain, you can be in on the chain, and hence track it. It's all quite techie and beyond me, but people are quite good at figuring things out.
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  24. The Internet Member

    Interesting. So bitcoins are unique and should be traceable.
  25. Anonymous Member

    IIUC, the coins are traceable by anyone with the technical skills but the owner of said coin may or may not be traceable.

    The block chain is a permanent record of all BC transactions. If you set up a BC wallet, you are downloading the block chain. This is updated constantly, and maintains the integrity of the system. I cannot explain the tech details, I really don't understand them. And time will tell how secure the software itself is. So far, it seems the software is good, and the weak link is always the human factor.

    The article about the 96K stolen coins talked about how coins are 'tumbled', meaning sent here and there, mixing them up with other coins, in order to launder them. but if you learn about the scam early enough, you can add your coin to their transaction, and be part of the chain, making it a snap to track. They also mentioned it being hard to tumble that many coins, since it overwhlems the BC network.
  26. muldrake Member

    So wait. This means that criminals commit crimes? I'm shocked, shocked!

    Who would think that sending criminals money in a currency designed so that transactions are absolutely irrevocable could be a risky activity?
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  27. Random guy Member

    This Sheep Market stunt reminds me strangely of some other scam. Hmmm, money on account you can't withdraw, where have I heard that one before...
  28. The Wrong Guy Member

    New Silk Road Drug Market Backed Up To '500 Locations In 17 Countries' To Resist Another Takedown

    “They may have sunk one ship, but now they have awoken the kraken,” wrote the new operator of the relaunched Silk Road anonymous black market for drugs on the site’s forums last October. Now that black market administrator has changed the metaphor to a monster with a few more heads.

    On Thursday night the pseudonymous entrepreneur known as the Dread Pirate Roberts – who inherited his nickname from the owner of the original Silk Road before it was shut down by the FBI on October 2nd – announced that he’s now distributed encrypted portions of the Silk Road’s source code as well as portions of the cryptographic keys to decrypt those pieces to 500 locations in 17 countries around the world, the better to relaunch the site immediately if law enforcement were to again track down the servers that host the site despite its use of the anonymity software Tor and the cryptocurrency Bitcoin to hide its location.

    “If I go down, people publish their part of the puzzle and it is trivial to unlock the backups,” he wrote to me in an email. “Hydra effect on a massive scale.”

    Roberts wouldn’t provide details of the encryption scheme he’s using to distribute the code or how many individuals have received parts of it, but wrote that “it is out of the range of even entire groups of nations to properly contain,” he said. He added that he’s prevented those backup keyholders from gaining access to the source code until the site is seized or destroyed. “Until Silk Road is taken down,” he writes, “None of them have access to our source code due to our method of distribution not giving any single user absolute trust, we could even have several of them collude against us and it is unlikely they will be able to actually reveal the source code.”

    Continued at
  29. muldrake Member

    Bitcoin is currently plunging. I'm kind of glad actually, as I dumped above $1,000. It has been as low as $646 today but I'm looking for below $600. Hope I don't miss it while I'm asleep. Previous patterns of speculative bubbles are that BTC crashes to somewhere well above where it started its ascent, but leaving butthurt people who bought it because it was going up in price, absolutely the dumbest reason to buy something.
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  30. Anonymous Member

    IOW, a roller coaster ride. Any idea what triggered the big drop?
  31. muldrake Member

    China (where a lot of recent buyers were) announced banks weren't allowed to treat BTC as a currency, basically. Just Google Bitcoin China for some of that hysteria. But just as a natural event, it's due for a correction. I doubt the Chinese news actually has much to do with it.

    The price today has ranged from USD 1016 to 646. That is what is called "volatility" but with BTC this kind of activity occurs in minutes rather than days or months. It actually went from 660 to 709 just while I was writing this post.
  32. JohnnyRUClear Member

    FTR, the video I linked doesn't cover the technical underpinnings, so you weren't missing out on that.
  33. muldrake Member

    Actually, not. The protocol is designed to ensure that the average block creation time will be 10 minutes. The difficulty is adjusted to make sure this happens. The "reward" (how much BTC) is generated is also similarly adjusted so that even greater block creation by the network as a whole will not result in more BTC.

    So there is a distinct rate of diminishing returns in attempts to take over the network or the production of BTC that make such efforts self-punishing.
  34. muldrake Member

    Unless a series of academics starting from David Chaum in the early '90s with his initial proposals for digital currencies were scammers, and everyone who peer-reviewed similar concepts for the last 20 years or so are also scammers, and everyone in the open source community who looked at the code as it was developed, and the people currently examining every piece of open source software coming out and trying to break it are scammers, that is one of the least worries BTC has.

    The number of people who are scamming using BTC as a medium to receive payments from their victims is a much more serious problem, unintended but sort of built into the system, because BTC payments are absolutely irrevocable. The most common scam (other than simply selling something that doesn't exist and then bolting) is to trade BTC (an irrevocable transaction) for something like Paypal (which basically automatically reverses if the Paypal customer makes even a totally bogus complaint).

    So BTC has immense advantages to vendors, who can be sure that if their BTC arrives, they have actually been paid and they can ship without any fear of fraud. The transaction can't be reversed. Once it's on the blockchain and confirmed, they have that money period. On the customer end, though, your only recourse would be to go directly after the vendor. If you are foolish enough to deal with vendors you don't know, well, that's kind of your own fault.

    However, of all the threats to BTC out there, that it was developed by scammers is about zero probability. The mathematical and cryptographic ideas that led to it existing are so fundamentally sound and have been examined by the best minds in the relevant fields for over 20 years before being implemented. IMO the main reason they weren't implemented earlier is that the technology to do so simply just didn't exist or at least wasn't widespread enough to encourage adoption.

    ETA: None of this is to say that the BTC community, such as it is, is anything other than a sea of sharks and scammers mixed in with idealists, sometimes naive. I would not advise you tell your grandmother to get involved right now. Despite attempts to develop "web of trust" type technologies to make avoiding scammers easier, the field of BTC commerce is still definitely in a Wild West stage. Unless you know what you're doing, watch out. Actually, even if you do know what you're doing, watch out. Trust the math. You can. Other than that, trust no one.
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  35. JohnnyRUClear Member

    This. ^^^^^

    I'll take a guess that Bitcoin escrow entities will emerge to address the irrevocability issue.
  36. The Wrong Guy Member

    Here's one report about it:

    Bitcoin falls $300 after Chinese crackdown | RT Business

    The value of bitcoin has dropped by $300 and continues to fall following a clampdown on the controversial crypto-currency by the Chinese government.

    China’s central bank, the People's Bank of China, and five government ministries have said they do not view bitcoins as a real currency, as they have “no legal status or monetary equivalent,” and have warned local banks and businesses against using it.

    The announcement saw the digital currency crashing on the MT.Gox Bitcoin exchange from a record high of $1,216 to $870.

    The value of one bitcoin then bounced back to $1,045 for a short period of time, before dropping again to less than $660 on the night of December 7.

    France’s central bank also had some harsh words to say about bitcoin this week, calling it an unreliable and risky means of investment.

    "The system can collapse at any moment, if investors want to unwind their positions but find themselves holding portfolios that have become illiquid," the French bank said.

    However, bitcoin continues to garner support in the US, with Bank of America Merrill Lynch predicting a bright future for the virtual currency.

    “We believe bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers,” a report issued by Merrill Lynch said Friday. “As a medium of exchange, Bitcoin has clear potential for growth, in our view.”

    Continued here:
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  37. DeathHamster Member

    Still... I look at the SETI project, which is doing a fundraising drive, and I think, hmm. If only they could redirect just some of those donated cycles to bitcoin mining...
  38. The Internet Member

    Sounds like bitcoin mining is not an easy way to make money, given that the rate of bitcoins entering the economy is fixed no matter how much collective mining is going on.

    Is mining really just useless busywork? Or do those CPU cycles do humankind some good?

    I guess the value of a bitcoin is what people think it's likely to be worth at some future moment when they decide to translate their bitcoins into dollars. So if bitcoins are going to work out, you'd expect their value to become relatively stable compared to other investments. Until then, seems like psychology and China are major wild card factors.
  39. DeathHamster Member

    Want: recordings of 911 calls where people report that their drug money bitcoins were stolen by drug dealers.
  40. Anonymous Member

    This is one of the best articles I've seen about BC
    That might answer one question. If you never convert BC to dollars, Yuan, Yen etc, then you are anonymous.
    He comes down firmly against BC, for reasons I've never heard before.

    The article talks about how the division of labor is firmly based in money and the price system, and how BC don't have enough currency as currency in world markets to work as money. IOW, they only work as long as we have dollars, Yen etc to tie the BC to.

    Fascinating article.
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